539 Phil. 236
GARCIA, J.:
On 16 October 1990, Rafael M. Maliksi filed a complaint against the San Miguel Corporation-Magnolia Division, herein referred to as SMC and Philippine Software Services and Education Center herein referred to as PHILSSEC to compel the said respondents to recognize him as a regular employee. He amended the complaint on 12 November 1990 to include the charge of illegal dismissal because his services were terminated on 31 October 1990.The Labor Arbiter declared Maliksi a regular employee of PHILSSEC and absolved SMC from liability. Dispositively, the Labor Arbiter's decision reads:
The complainant's employment record indicates that he rendered service with Lipercon Services from 1 April 1981 to February 1982 as budget head assigned to SMC-Beer Division, then from July 1983 to April 1985 with Skillpower, Inc., as accounting clerk assigned to SMC-Magnolia Division, then from October 1988 to 1989 also with Skillpower, Inc. as acting clerk assigned to SMC-Magnolia Finance, and from October 1989 to 31 October 1990 with PHILSSEC assigned to Magnolia Finance as accounting clerk. The complainant considered himself as an employee of SMC-Magnolia. Lipercon Services, Skillpower, Inc. and PHILSSEC are labor-only contractors and any one of which had never been his employer. His dismissal, according to him, was in retaliation for his filing of the complaint for regularization in service. His dismissal was illegal there being no just cause for the action. He was not accorded due process neither was his dismissal reported to the Department of Labor and Employment.
PHILSSEC disclaimed liability. As an entity catering (sic) computer systems and program for business enterprises, it has contracted with SMC-Magnolia to computerize the latter's manual accounting reporting systems of its provincial sales. PHILSSEC then conducted a three phase analysis of SMC–Magnolia set up: first the computer needs of the firm was (sic) determined; then, the development of computer systems or program suitable; and, finally, set up the systems and train the employees to operate the same. In all these phases, PHILSSEC uses its computer system and technology and provided the necessary manpower to compliment the transfer of the technology to SMC-Magnolia. Complainant Maliksi was one of those employed by PHILSSEC whose principal function was the manual control of data needed during the computerization. Like all assigned to the project, the complainant's work was controlled by PHILSSEC supervisors, his salary paid by the agency and he reported directly to PHILSSEC. The computerization project was completed on 31 October 1990, and so, the complainant was terminated on the said date.
SMC, on the other hand, submitted its position. In the contract SMC entered with PHILSSEC, the latter undertook to set up the computerization of the provincial sales reporting system of Magnolia Division. To carry out the task, PHILSSEC utilized 3 computer programmers and the rest were data encoders. The complainant being one of the compliments (sic) performed the following functions:xxx xxx xxx
SMC likewise contends that PHILSSEC exercised exclusive managerial prerogative over the complainant as to hiring, payment of salary, dismissal and most importantly, the control over his work. SMC was interested only in the result of the work specified in the contract but not as to the means and methods of accomplishing the same. Moreover, PHILSSEC has substantial capital of its own. It has an IBM system, 3 computers, 17 IBM or IBM-compatible computers; it has a building where the computer training center and main office are located. What it markets to clients are computer programs and training systems on computer technology and not the usual labor or manpower supply to establishment concerns. Moreover, what PHILSSEC set up employing the complainant, among others, has no relation to the principal business of SMC, which is food and beverage. It was a single relationship between the people utilized by PHILSSEC and SMC...' [3]
WHEREFORE, the complainant, Rafael Maliksi, is recognized as a regular employee of Philippine Software Services and Education Center which respondent is ordered to reinstate him to a job of the same level as his previous position in any of the projects where there is a vacancy and without loss of seniority rights. A five months backwages is awarded because the prolonged suspension from his work was brought about by his refusal to take any job offered by PHILSSEC earlier in the proceedings of this case. The respondent, SMC-Magnolia Division, is exempted from any liability as the complaint against the said corporation is dismissed for lack of merit.Maliksi appealed to the NLRC. In turn, in a decision dated January 26, 1998, the NLRC reversed that of the Labor Arbiter by declaring Maliksi a regular employee of the petitioner and ordering the latter to reinstate him without loss of seniority rights and with full benefits, to wit:
SO ORDERED.[4]
WHEREFORE, as recommended, the decision below is hereby SET ASIDE. Accordingly, judgment is hereby rendered directing respondent SMC-Magnolia Division to reinstate complainant as a regular employee without loss of seniority rights and other privileges and to pay complainant full backwages, inclusive of allowances and other benefits or their monetary equivalent, computed from the time his compensation was withheld from him up to time of his actual reinstatement, plus 10% of the total money award for and attorney's fees.From the aforementioned decision of the NLRC, SMC went on certiorari to the CA in CA-G.R. SP No. 50321.
SO ORDERED.[5]
We DENY.I
The Court of Appeals gravely erred in declaring private respondent a regular employee of petitioner SMC despite its findings that PHILSSEC, the contractor that employed private respondent, is an independent job contractor.
Corollarily, the declaration of the Honorable Court of Appeals that private respondent is a regular employee of petitioner SMC proceeds from the erroneous premise that private respondent was already a regular employee of SMC when he was hired by the independent contractor PHILSSEC. Having been placed in petitioner SMC by a supposed labor-only contractor, for just five months and for a different job, three years after his last assignment therein, private respondent had not thereby become a regular employee of petitioner SMC.II
The Court of Appeals gravely erred in ultimately resolving the case upon the principle that "all doubts must be resolved in favor of labor"; certainly, protection to labor does not imply sanctioning a plain injustice to the employer, particularly where private respondent was shown to have stated falsehoods and committed malicious intercalations and misrepresentations.III
The Court of Appeals gravely erred in declaring that private respondent was not part of the of the personnel group in the computerization program of petitioner SMC under PHILSSEC.
In the case at bar, petitioners were employed at various periods from 1985 to 1989 for the same kind of work they were hired to perform in September 1989. Both the labor arbiter and the respondent NLRC agree that petitioners were employees engaged to perform activities necessary in the usual business of the employer. As laborers, harvesters or sprayers in an agricultural establishment which produces high grade bananas, petitioners' tasks are indispensable to the year-round operations of respondent company. This belies the theory of respondent company that the employment of petitioners was terminated due to the expiration of their probationary period in June 1990. If at all significant, the contract for probationary employment was utilized by respondent company as a chicanery to deny petitioners their status as regular employees and to evade paying them the benefits attached to such status. Some of the petitioners were hired as far back as 1985, although the hiring was not continuous. They were hired and re-hired in a span of from two to four years to do the same type of work which conclusively shows the necessity of petitioners' service to the respondent company's business. Petitioners have, therefore, become regular employees after performing activities which are necessary in the usual business of their employer. But, even assuming that the activities of petitioners in respondent company's plantation were not necessary or desirable to its business, we affirm the public respondent's finding that all of the complainants (petitioners) have rendered non-continuous or broken service for more than one (1) year and are consequently considered regular employees.It is worth noting that, except for the computerization project of PHILSSEC, petitioner did not make any insinuation at all that the services of Maliksi with SMC was project-related such that an employment contract with Lipercon and Skillpower was necessary.
We do not sustain public respondent's theory that private respondent should not be made to compensate petitioners for backwages because its termination of their employment was not made in bad faith. The act of hiring and re-hiring the petitioners over a period of time without considering them as regular employees evidences bad faith on the part of private respondent. The public respondent made a finding to this effect when it stated that the subsequent re-hiring of petitioners on a probationary status "clearly appears to be a convenient subterfuge on the part of management to prevent complainants (petitioners) from becoming regular employees." (Emphasis supplied)
This is the third time that the parties have invoked the power of this Court to decide the labor dispute involved in this case. The generative facts of the case are as follows:We find respondent Maliksi to be similarly situated with those of the complainants in Madriaga. Indeed, Lipercon and Skillpower have figured in not just a few of our decisions,[15] so much so that we are inclined to believe that these two were involved in labor-only contracting with respect to Maliksi. We hold that the finding of the NLRC and the CA as to SMC's resorting to labor-only contracting is entitled to consideration in its full weight.On 04 March 1988, the NOWM and a number of workers-complainants filed with the Arbitration Branch of the NCR, NLRC, Manila, against San Miguel Corporation, Philippine Dairy Products Corporation, Magnolia Dairy Products, Skillpower Corporation and Lipercon Services, Inc. for illegal dismissal.Aggrieved by the said decision of the Voluntary Arbitrator, SMC and PDPC filed a petition for certiorari before the Supreme Court.xxx xxx xxx
The Voluntary Arbitrator rendered a decision on 29 July 1988, the dispositive of which states:
WHEREFORE, it is hereby declared that complainants are regular employees of SMC and PDPC. Accordingly, SMC and PDPC are hereby ordered to reinstate the dismissed 85 complainants to their former positions as their regular employees effective from the date of the filing of their complaints with full backwages less the daily financial assistance of P30.00 per day each, extended to them by Lipercon and Skillpower.
It was upon the filing of the said petition for certiorari that the Court had the first opportunity to pass upon the controversies involved in this case. In a Resolution dated 30 August 1989, the Court dismissed G.R. No. 85577 entitled, "Philippine Dairy Products Corporation and San Miguel Corporation – Magnolia Dairy Products Division v. Voluntary Arbitrator Tito F. Genilo of the Department of Labor and Employment (DOLE) and the National Organization of Workingmen (NOWM)" for lack of merit. The Court held in full:Individual private respondents are xxx [SMC, et al.] laborers supplied to petitioners by Skillpower Corporation and Lipercon Services, Inc., on the basis of contracts of services. Upon expiration of the said contracts, individual private respondents were denied entry to petitioners' premises. Individual private respondents and respondent union thus filed separate complaints for illegal dismissal against petitioners San Miguel Corp., Skillpower Corporation and Lipercon Services, Inc., in the [NLRC, NCR] After consolidation and voluntary arbitration, respondent Labor Arbiter Tito F. Genilo rendered a decision xxx declaring individual private respondents regular employees of petitioners and ordering the latter to reinstate the former and to pay them backwages. On motion for execution filed by private respondents, Labor Arbiter Genilo issued on October 20, 1988 an order directing, among others, the regularization of "all the complainants which include those still working and those already terminated." Hence, this petition for certiorari with injunction.In fine, the Court affirmed the ruling of the Voluntary Arbitrator and declared that therein complainants are regular employees of San Miguel Corporation (SMC) and PDPC. It must be noted that in the abovequoted Resolution, the Court extended the benefit of regularization not only to the original complainants but also to those workers who are "similarly situated" to therein complainants. Herein petitioners are among those who are "similarly situated."[14] (Emphasis supplied)
Petitioners contend that prior to reinstatement, individual private respondents should first comply with certain requirements, like submission of NBI and police clearances and submission to physical and medical examinations, since petitioners are deemed to be direct employers and have the right to ascertain the physical fitness and moral uprightness of its employees by requiring the latter to undergo periodic examinations, and that petitioners may not be ordered to employ on regular basis the other workers rendering services to petitioners by virtue of a similar contract of services between petitioners and Skillpower Corporation and Lipercon Services, Inc. because such other workers were not parties to or were not impleaded in the voluntary arbitration case.
Considering that the clearances and examinations sought by petitioners from private respondents are not 'periodic' in nature but are made preconditions for reinstatement, as in fact the petition filed alleged that reinstatement shall be effective upon compliance with such requirements, (pp. 5-6 thereof) which should not be the case because this is not a case of initial hiring, the workers concerned having rendered years of service to petitioners who are considered direct employers, and that regularization is a labor benefit that should apply to all qualified employees similarly situated and may not be denied merely because some employees were allegedly not parties to or were not impleaded in the voluntary arbitration case, even as the finding of Labor Arbiter Genilo is to the contrary, this Court finds no grave abuse of discretion committed by Labor Arbiter Genilo in issuing the questioned order of October 20, 1988.
ACCORDINGLY, the Court Resolved to Dismiss the petition for lack of merit.